STRATEGIC BRAND MANAGEMENET

ESSAY QUESTIONS SUMMER 2016

1. Discuss the cycle of brand management and problems of brand commoditization using an example
of an arbitrary brand.
Brands draw attention through the new products they create and bring onto the market. Any brand
innovation necessarily generates plagiarism. Any progress made quickly becomes a standard to which
buyers grow accustomed: competing brands must then adopt it themselves if they do not want to fall
short of market expectations. For a while, the innovative brand will thus be able to enjoy a fragile
monopoly, which is bound to be quickly challenged unless the innovation is or can be patented. The role
of the brand name is precisely to protect the innovation: it acts as a mental patent, by becoming the
prototype of the new segment it creates advantage of being a pioneer. Dynamic view of market reveals
in turn who innovated first, and who has simply followed the leader: brands protect innovators, granting
them momentary exclusiveness and rewarding them for their risk-taking attitude.
Brands cannot, therefore, be reduced to a mere sign on a product, a mere graphic cosmetic touch: they
guide a creative process, which yields the new product. Products like fruit, water, even diamonds are
considered commodities. Those products are mostly sold on basis of price and not brand. However,
some brands such as Jana have been able to make brands out of commodities and attract very loyal
customers. They did so by making the packaging attractive and changing it often, but it is always
something eye-catching, the first thing you see on the water bottle shelf.

2. Explain the brand identity prism. Use the examples.

The brand identity prism consists of six integrated parts that are essential to building a strong brand.
Physique: physical specificities and qualities. It is both the brands backbone and its tangible
added value.
Personality: the way it speaks of its products or services shows what kind of person it would be if
it were human.
Culture: the set of values feeding the brands inspiration. Basic principles governing the brand in
its outward signs
Relationship: this facet defines the mode of conduct that most identifies the brans. This has a
number of implications for the way the brand acts, delivers services, and relates to its customers.
Customer reflection: because its communication and its most striking products build up over
time, a brand will always tend to build a reflection of an image of the buyer or user which it
seems to be addressing.
Self-image: self-image is the targets own internal mirror (I feel, I am).
For an example of all these aspects, we can use Coca-Cola. The physique part is the classic coca-cola
bottle that is a part of the design of all the products (it is present even on the cans), as well as the iconic
red color that it is famous for. The personality part reflects happiness, good times, sharing, etc. The
culture part reflects the typical American culture. The relationship part is particularly strong. Coca-cola
consumers form a community. They are part of a team and they share similar values. The reflection part
shows coca-cola to be for young, vibrant, energetic people that are always on the move and always with
friends. however, the brand is intended for almost everyone. Coca-colas self-image is pushed onto the
consumers constantly. Virtually every day there is some type of communication they are faced with.
They push boundaries and try to show consumers that they are more than just a drink.

3. What are the justifications for creating distributors brands from consumers perspective? Use an
example to support your statements.
The counter branddistributors branda private label, created to divert clientele from a particular big
brand imitating and vey similar to the big brand
Private label has changed to the point where retailers are using it as the premium brand in some cases
Tesco is an example of this. At Tesco, the number one distributor in Britain, a survey of the fruit juice
aisle is revealing: far from being a product, the distributors brand is in reality a segmented range, from
the lowest possible price to the top of the range, under the label Tesco Finest. These distributors:
allocate the majority of their shelf space to them, eliminating all weaker brands;
have segmented their portfolio of distributors brands in order to meet the different
expectations of their without forcing them to identify with the shop name
segment their range in order to cover not only different price levels, from the cheapest to the
highest price on the entire shelf, but also the emerging needs known as trends
Distributors brands occur in all countries, from the richest and most developed to developing countries.
In Eastern countries, low- cost products and hard discount are growing rapidly. The distributors brand is
not a phenomenon linked to low income. In Switzerland which has one of the highest per capita
incomes in the world the leading food brand is Migros, well ahead of Nestl.

4. Explain the process of building brands in services. Use the example to show the importance of the
human component, service process and other characteristics of the service for brands building.
Service brands are characterized by the need to maintain a consistently high level of service delivery
throughout hundreds, or even thousands of staff and service encounters. Although a product
component may be involved, it is essentially the service that is the brand.
These are more complex than product brands for two reasons:
because it is always harder to brand something you cant touch
because they are delivered directly by employees

Service brands conditions are:

Internal branding
External branding
Delivering everything that company promissed
Connection of satisfaction with concrete brand
Names and logos are not enough
In services, there is no difference between the internal and the external. It is what is behind the brand
that makes the brand.
Service brand is constructed internally. Orange company is built up through hours and hours of
training all staff how to behave in an Orange way, according to Oranges codes and values. This
concerns all points of contact with the customer, in the store, from the call centre or over the
internet.
Employees cannot be expected to treat customers well if they are not happy themselves. In
order to create the relaxed, warm atmosphere that characterises Starbucks, its founder Howard
Schultz innovated by responding to the worries of many part-time staff: with good health
insurance cover, for example.
Another essential distinction between services and products is that the factory is in the store.
The location for the service production is also the place of its consumption. This is why it is so
important to take care of the little details, since they lead to expectations and feelings.
Since service is carried out by people, their variability is a risk for the brand. The brand promises
regular and dependable quality hence the importance of defining strong behavioural norms,
supported by plenty of training (McDonalds and Disney are models of this type)
Brand is necessarily linked to the setting up of internal and customer-facing processes. IT is necessary to
homogenise the internal processes, to provide more regularity and the client experience.. In services, it
is important to make the intangible. For the employer brand, the task is to develop its reputation among
executives or students of the top universities, based not on better salaries, but on shared values.

5. There are two approaches to luxury brand building. On the example of Calvin Klein (CK) brand,
analyze and argument: which approach is used and what are the differences between the approaches
when comparing CK and Louis Vuitton brands?
Two types of approaches- the first includes brands with a history behind them, while the second covers
brands that, lacking such a history of their own, have invented a story for themselves. The European
luxury brands place considerable emphasis on the actual product as a factor in their success, while the
US brands concentrate much more on merchandising, and the atmosphere and image created by the
outlets dedicated to their brand, in the realm of customer contact and distribution
Known for its provocative advertising campaigns as it is for its designs sleek lines, the CK brand has
consistently gained the attention of the public. It can be credited with revolutionizing designer jeans in
the 1980s and pushing the boundaries of sex in advertising. Philips-Van Heusen acquired the brand in
2003, allowing it to continue its international growth. They created a story for themselves.
On the other side, Louis Vuitton is a French fashion house founded in 1854 by Louis Vuitton and has a
history behind it. What was once a tiny little Parisian luggage shop is now the multifaceted jewel in the
crown that sits atop the head of Bernard Arnault, CEO of the fashion conglomerate LVMH. For well more
than a century, Louis Vuitton was best known for canvas-covered travel cases with flat, stackable shapes
that made them ideal for modern travel via planes, trains, and automobiles
6. Describe in detail the process of brand positioning. Use an example for each phase of the process.
Positioning a brand means emphasising the distinctive characteristics that make it different from its
competitors and appealing to the public. It results from an analytical process based on the four following
questions:
A brand for what benefit? This refers to the brand promise and consumer benefit aspect:
Orangina has real orange pulp, The Body Shop is environment friendly, Twix gets rid of hunger.
A brand for whom? This refers to the target aspect. For a long time, Schweppes was the drink of
the refined, Tango the drink for teenagers.
Reason? This refers to the elements, factual or subjective, that support the claimed benefit.
A brand against whom? In todays competitive context, this question defines the main
competitors, ie those whose clientele we think we can partly capture. Tuborg and other
expensive imported beers thus also compete against whisky, gin and vodka.
Positioning is a two-stage process:
First, indicate to what competitive set the brand should be associated and compared.
Second, indicate what the brands essential difference and raison dtreis in comparison to the
other products and brands of that set.
Choosing the competitive set is essential. While this may be quite easy to do for a new toothpaste, it is
not so for very original and unique products.

8. Which branding architecture alternative would you choose for companies in fast moving consumer
goods (FCMG) industry: branded house or house of brands? Justify your answers with examples.
A company with a branded house architecture has many products and offerings under one Masterbrand.
Its products dont have separate identities and all contribute to the strength of the masterbrand.
Examples of companies using this framework include HSBC and Virgin. Also, Coca-Cola last year
announced the One Brand strategy, resulting in Diet Coke, Coca-Cola Zero and Coca-Cola Life all being
advertised under the main Coca-Cola umbrella. A branded house architecture works when a company
targets a similar audience with different products, and wants to build the same proposition and the same
associations for different offerings.
In house of brands there are still many varied products and offerings, but they are marketed under
separate brands which have their own identities. For example, Procter & Gamble, whose brands range
from skin and hair care, to dishwashing and laundry detergents such as Ariel, Fairy, Always, Old Spice,
Gillette and Head & Shoulders. A house of brands structure is recommended when an organisation
targets different audiences with the same product categories and wants to build different propositions
and new associations for different products. House of brands is convenient when reputation risk related
to different products is high and you dont want other brands in your portfolio to be affected.

9. What are main cues and perimeters for identifying potential brand extensions and how do they
relate to the notion of brand values? To support your arguments, illustrate your answer.
 1. Big plan first - The brand wants to be a leader of what? How should we define its leadership by
product, category, need or target?
2. The limits of consumer research for managing extensions- It indicates what difficulty may arise
when using the same name on an extension.
3. Are our values here really valued there? - Many extensions fail because someone has
overestimated the value of the brand assets in the extension category. Do they really have a
motivating value? A second key question concerns competition. Does the proposed extension
really beat its competition?
4. An extension is not simply a new product or service, it entails a full new marketing mix. It
requires in fact that the organisation think more about the consumer than the brand. When Nike
launched its Nike Women extension, its management was so infatuated with the brand itself that
it forgot consumers - same design as their male counterparts, and only the sizes were adapted to
women. In order to succeed in this extension, it was first necessary to create relevant products.
5. Extension should meet trade expectations too- The success of Smirnoff Mule(za youth)
demonstrates that all good innovations must provide value to the distributor and to the
consumer.
6. The question of resources - The main source of failure of extensions is a lack of resources for the
launch.
7. How will the competition react? Will the competitor react at all?
8. Is the market really attractive? The fact that a brand can be extended does not mean it should be
extended. One must take into account future competition and the costs of remaining a
significant player in the category (the rate of innovation, rate of launches, marketing and sales
investment and so on).

10. Explain the brand architecture position regarding corporate strategy. Give arguments of advocates
and opponents for the idea of the connection both of them at the top of the company.
Parameters that should be taken into account when choosing a branding strategy:
The first is corporate strategy, of which branding strategy is in fact the symbol,
The second parameter is the business model,
The third parameter for choosing a brand architecture is cultural.
In 2003, Schneider Electric, one of the leaders in the field of electrical distrbution and industrial control,
decided to revitalise its Merlin Gerin and Telemecanique brands. In so doing, Schneider ended an
initiative launched some 10 years previously with a different aim in mind, namely to replace individual
brands with a single, group brand. The companys new director outlined the strategic positioning of
Schneider Electric against GE, ABB and Siemens. Compared with these general electrical and electronic
giants, Schneider Electric is not a small general electrical company but rather likes to see itself as a multi-
specialist company. On the other hand, when compared with its many single-specialist competitors,
Schneider Electric is more of a general electrical company. So if it wants to position itself as a multi-
specialist company, the specialities must be offered by specialist brands, united by a group brand, a
single entity, which facilitates customer relations. Another consequence is that distributors will once
again become the official distributors of Merlin Gerin without there being any obligation, as in the past,
to automatically reference both brands.
The single brand is an advantage if you are already a single brand like Philips, one of the few
international brands whose reputation is based on the fact that it is distributed throughout the world.
Brand Architecture is part of corporate strategy. It should be established prior to creating a brand
strategy business
Allows for fewer stronger brands with less overlap
Minimizes waste and marketing inefficiency
Builds credibility for leveraging the brand into new opportunities for growth
Enables equity to flow through the portfolio

11. There are three different approaches to umbrella brand strategies plus the mixed strategy. Explain
each of them and select which one is the best from the customers' point of view. Give arguments for
your choice.
1. The flexible umbrella brand strategy:
Characterized by a single brand level: the products are not given a daughter brand. The umbrella brand
covers several product categories. The flexible umbrella brand architecture gives subsidiaries a great deal
of autonomy, which can motivate them and make it easier to recruit bosses with entrepreneurial
profiles.
2. The aligning umbrella brand (masterbrand):
The company accepts only a single brand for the whole, and consequently imposes descriptive names for
the products and services or divisions and branches. The parent brand provides not just a name, but a
frame of reference behind which everything should align. The masterbrand is strong because it brings
together a broad offering of products under highly differentiating common values.
3. Source brand strategy:
Identical to the umbrella brand strategy except that the products have their own brand name, also
known as double-branding. The family spirit dominates even if the offspring all have their own individual
names. The parent brand offers its significance and identity, modified and enriched by the daughter
brand in order to attract a specific customer segment.
4. Mixed approaches:
Companies adopt mixed configurations where the same brand can be, according to the product, range,
umbrella, parent or endorsing brand. Many hybrid situations result out of the series of small decisions
that are taken as and when a new product is launched.
From the customers point of view, the source brand strategy is the best because there is a strong tie to
the parent brand, while allowing for freedom of choosing what is most interesting to the customer, for
example Yves Saint Laurent has a wide range of perfumes, and each has its own specific name. however,
the selling point for all of them is the fact that they are tied to YSL.
12. What is the difference between brand endorsement and brand umbrella strategies? Do you think
that customers are able to notice the main role (idea) of using them?
Endorsing brand strategy
Endorsed brands, and sub-brands - For example, Nestle KitKat, Cadbury Dairy Milk. These brands include
a parent brand - which may be a corporate brand, an umbrella brand, or a family brand - as an
endorsement to a sub-brand or an individual, product brand. The endorsement should add credibility to
the endorsed sub-brand in the eyes of consumers. The brand gets the endorsement that it belongs to
specified company; e.g. Kit Kat gives the signal that it belongs to Nestle and Diary Milk conveys that it
belongs to Cadburys.
Umbrella branding is a marketing practice involving the use of a single brand name for the sale of two or
more related products. Umbrella branding is mainly used by companies with a positive brand equity. All
products use the same means of identification and they don't have additional brand names or symbols.
Umbrella Branding only works when the company has a line of very similar products.
So what I would say is the difference is that in umbrella branding all products use the same means of
identification and they don't have additional brand names or symbols, while in endorsment brand
strategies they do, and also I don't think that that customers are able to notice the main idea of using
them.

13. Comment multi-brand portfolio connection with different business strategy and explain rationality
of the companies decision to reduce or increase number of brands depending on strategies they
apply?
Most companies operating in todays complex market environment own and manage a brand portfolio: a
complex set of brands designed in response to market fragmentation, channel dynamics, global realities,
heightened competition, commoditization, and pressures to leverage and extend existing brand assets in
cost-effective ways. Firms are motivated to be concerned with brand portfolio strategy because it
provides the structure and discipline needed to support and enable a successful business strategy. Brand
portfolio strategy becomes particularly salient when a company confronts pressing growth goals or
pending mergers, acquisitions, and alliances.
CEOs acknowledge brand portfolio strategy as a powerful driver of shareholder value and thus a crucial
boardroom decision. Five portfolio strategy variations along what has been referred to as the brand
relationship spectrum help firms structure and organize their branded offerings in a way that best meets
market conditions and company goals. The spectrum includes branded house, sub-branding, endorsed
branding, and house of brands strategies, as well as a hybrid mix of the above. The five strategies differ
significantly in (1) their leverage and prominence or visibility of corporate brand equity, and (2) the
specific brand entity that drives consumer behavior; these variations in turn affect expected patterns of
rewards and risks.
14. What are the main factors of brand decline and how should companies address them?
Main factors which cause brand decline include:
1. Managerial Action
Brands often decline because of leadership, management, and employees making excuses rather than
acting with integrity.
2. Environmental factors
Markets are dynamic in nature and can be significantly Influenced by the larger environment in which
they operate. They can undergo major transformations, which in turn have an impact on the various
companies in an industry and their brands. Kodak a leading photography brand faced an Environmental
change when its old camera model started declining due to arrival of digital era. Soon Kodak realized the
implications of this environmental factor, and made necessary investments in the future. Kodaks actions
helped it to maintain a leading role in the new market.
3. Competative Actions
In most markets today, a brand faces relentless onslaught from its competitors. This can become
particularly problematic if the competitors have deep pockets. Initially there were four brands in USA for
sporty apparels. Puma and Adidas are good examples of brands that declined in the face of intense
competition. While very strong in Europe, both were almost completely squeezed out of the U.S. market
by Nike and Reebok, which were more in tune with the trends in the American market.

There are three ways in which companies may address to them in order to overcome brand declining:
1. Rebuild quality
2. Resist temptation to milk the brand
3. Pursue a defined target market.

15. Explain the basic difference between brand rejuvenation and brand repositioning on the example
of brand you are familiar with.
Difference between brand rejuvenation and brand repositioning is that brand rejuvenation is just
improvements of existing brands. Companies are trying to improve product attributes and enchance its
overall appeal. It helps overcome the consumers boredom in seeing the same product on the selves for
years and help bring attention to the product once again. It's often visible in car industry when
companies often put new version of a car on the market (golf 4,5 and 6... or sport version), they are all
pretty similar but not the same.
In brand positioning company changes brand's status in the marketplace. Usually this is done through
change of marketing mix. It is usually done to keep up with consumer wants and needs. On B&H market,
Retro shoes is currently working on repositioning itself from medium-quality and lower price shoes
retailer to high quality, high price shoe retailer. They are changing their product.
16. Which method of brand rejuvenation is used by Sony? Give us arguments for your statements.
Three major factors contributed to Sonys ascent to global supremacy in the consumer electronics sector
and they are:
Innovation defined the brand character of Sony - ability to constantly create products
Visionary leadership - create an environment that nurtured experimentation, and innovation;
importance of branding
Pioneer advantage - defining the rules of the game

Sonys brand rejuvenation:

Regain focus - from a brand perspective, unrelated diversification will be more detrimental than
helpful
Elevate marketing/branding to the boardroom - Sony should revamp R&D, design, and marketing;
Sony needs to elevate the marketing function to the boardroom and enable marketing to take a lead of
the business and the strategy Sonys brand rejuvenation 2
Brand oriented leadership - Sonys path back to brand supremacy can happen only if it is guided by a
brand oriented leadership
Design, features and the cool factor it is very important for Sony to regain the cool factor and beef
up its designs and features

17. What are the main options and methods for brand valuation? Which one would you choose if you
are a manager of the company with the strong brand and why?
Two dimensional mapping: horizontal axis refers to time- valuation based on historical costs and
present earnings, the vertical axis is real/virtual dimension which rely on hard facts
Valuation by historical costs: The brand is an asset whose value comes from investments over a
period of time (even though accountants do not strictly regard this as a true form of investment).
Valuation by replacement costs: To overcome the difficulties arising from the historical costs
approach, another approach can be more useful taking its various characteristics into account
(awareness, absolute and relative market share, distribution network, image, leadership etc).
This method would be preferred in case of dealing with strong brand.
Valuation by market price: When valuing a brand why not start with the value of similar brands
on the market? This is how property or second-hand cars are valued.
Valuation by royalties: What annual royalties could the company hope to receive if it licensed the
rights to use the brand? The answer to this question would form a means of directly measuring
the brands financial contribution and would also solve the problem of separability.
Valuation by future earnings: Since the brand aspires to become an asset, it is best to begin by a
reminder of what an asset is. It is an element which will generate future profits with reasonable
 certainty. Valuation methods have been developed on the basis of expected returns of brand
ownership
Valuation by present earnings: Who can predict the future? How can one be sure that the
forecasts of a business plan will be matched?
The multiple method: developed in the UK and is used by companies such as Grand
Metropolitan whose decisions to post brand values to their balance sheets caused a controversy
which is still not settled.
I would choose the first method because I believe it takes the most factors into account.

18. Explain the main elements (factors) which are evaluated in Brand Asset Valuator model. Evaluate
the model itself and its potential for the brand valuation.
1. Differentiation measures the degree to which a brand is seen as different from others, it is the
ability of a brand to stand apart from its competitor. A brand should be unique as possible.
2. Relevance measures the breadth of a brands appeal.This refers to how closely can the
consumers relate to the brands offering and is a significant driver for a brands penetration.
3. Esteem measures how well the brand is regarded and respected. This refers to the consumer
perception about the brand. Whether a brand is popular or not, whether it delivers on its stated
promises
4. Knowledge measures how familiar and intimate consumers are with the brand. This refers to the
degree of awareness about a brand in the minds of its consumers.
New brands show low levels on all four pillars. Strong new brands tend to show higher levels of
Differentiation than Relevance, while both Esteem and Knowledge are lower still. Leadership brands
show high levels on all four pillars. Finally, declining brands show high Knowledgeevidence of past
performancerelative to a lower level of Esteem, and even lower Relevance and Differentiation. BAV
serves as an exceptional diagnostic tool for building and managing brands. It identifies the strategic
direction to maximize brand strength and helps clarify the role of elements in the marketing mix.